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Tipton measure would offset unequal mineral royalty split

The recently approved federal budget makes permanent a 51 percent-49 percent split favoring the federal government in the division of federal mineral lease revenue, a state of affairs that officials said was part of the price of avoiding a budget fight.

“The bipartisan budget deal was not perfect — and not the compromise I would have written — but it prevents a destructive government shutdown and averts some of the catastrophic effects of yet another round of automatic budget cuts,” U.S. Sen. Mark Udall, D-Colo., said Thursday.

One resolution, however, could come from proposals that cropped up in the wake of sequester spending cuts that claimed 5 percent of states’ shares of federal mineral royalties in 2012 and 2013.

Legislation pending before the House would give affected states the option to collect 50 percent of royalties directly from producers instead of the U.S. Department of the Interior.

The measure “eliminates the middleman and the need for a 2 percent administrative fee for Washington bureaucrats, by empowering states to voluntarily collect their full 50 percent share of mineral royalties directly from producers,” said U.S. Rep. Scott Tipton, R-Colo, a cosponsor of the measure.

The Interior Department began collecting the 2 percent administrative fee in 2008.

The split is intended to direct money to local communities to help them deal with the consequences of mineral and energy development on nearby federal holdings.

Udall and Bennet introduced legislation that would prohibit payments from being delayed by the sequester, and Bennet noted that Colorado communities need to know they’ll get the payments and do so on time.

“We’ll continue making that a priority in the new year,” Bennet said.

Udall said he remained committed to ensuring that those communities get their fair share of federal mineral leasing revenue and “will keep working with my colleagues across the aisle and throughout the West to address this issue.”

The Mesa County Mineral Lease District last week distributed grants worth $1.8 million from the mineral lease revenue to Palisade, Colorado Mesa University, Fruita and three Grand Valley fire departments.

The focus on the sequestration and the uneven royalty split “is an opportunity for Tipton and Udall to put a spotlight on the fact that Congress already has a solution to this,” said David Ludlam, executive director of the West Slope Colorado Oil and Gas Association. “It just needs to be passed.”